Problem 11-3 Effect of discount rate [LO3)] g scientist is killed in a plane crash. It is anticipated that he could have earned $240,000 a year for the A brilliant youn next 50 years. The attorney for the plaintiff's estate argues that the lost income should be discounted back to the present at 4 percent. The lawyer for the defendant's insurance company argues for a discount rate of 8 percent. What is the difference between the present value of the settlement at 4 percent and 8 percent? Compute each one separately. Use Appendi financial calculator methods. (Do not round intermediate calculations. Round your answers to 2 ix D for an approximate answer but calculate your final answer using the formula and decimal places.) Input variables: Annual income Number of years Plaintiffs discount rate Defendant's discount rate Appendix plaintiff's factor Appendix defendant's factor $240,000 50 years 0.04 0.08 21.482 12.233 Solution and Explanation PV at plaintiff's rate PV at defendant's rate Difference Appendix values PV at plaintiffs rate PV at defendant's rate Difference